Statement 3: Fiscal Strategy and Outlook
Overview of fiscal position
Underlying cash deficits are expected across the forward estimates period, with a deficit of $57.6 billion in 2009‑10 (4.9 per cent of GDP) expected to fall to a deficit of $28.2 billion in 2012‑13 (2.0 per cent of GDP) (Table 1). These deficits largely stem from the natural deterioration in expected tax receipts as a result of the global recession. Compared to the 2008‑09 Budget, tax receipts have been revised down by around an estimated $210 billion over the period 2008‑09 to 2012‑13.
Beyond the forward estimates, the budget is projected to return to surplus by 2015‑16 underpinned by the natural recovery in tax receipts as the economy improves and expenditure restrained.
Australia's budget position remains sound and sustainable. Australia's deficit in 2009‑10 is less than half that of the major advanced economies' collective deficit of 10.4 per cent of GDP and considerably smaller than the 8.8 per cent of GDP collective deficit for advanced economies as a whole. Significantly, advanced economies will remain in collective deficit into the medium term, with a deficit of 3.9 per cent of GDP in 2014.
Australia's balance sheet is strong, and will continue to be one of the strongest in the world. After peaking at 13.8 per cent of GDP in 2013‑14, net debt is expected to fall to 3.7 per cent of GDP by 2019‑20. In comparison, net debt in advanced economies will continue to rise to a substantial 80.6 per cent of GDP in 2014.
Table 1: Budget aggregates
- Excludes expected Future Fund earnings.
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